The People’s Bank of China (PBOC) has opened a new fintech committee to investigate the impact of fintech on monetary policy, financial markets, payments and settlement, and financial stability. Besides, the PBOC will study how innovative technologies, such as big data, cloud computing, and artificial intelligence (AI), can be applied to strengthen regulatory oversight.
The fintech revolution, the central bank stated, has “injected new vitality”, but also “brought new challenges” for the security of financial services.
The PBOC “will further strengthen exchanges and cooperation at home and abroad, establish and improve the financial and technological innovation management mechanism that is suitable for China’s national conditions, handle the relationship between safety and development and guide the proper use of new technologies in the financial field.”
In addition, the bank said it plans to cooperate with other parties, including academia, researchers and businesses, to jointly work on promoting the “healthy and orderly development” of the fintech sector in China.
Meantime, the central bank is supporting a venture capital company Silk Ventures that will invest $500 million in US and European startups focused on fintech, regtech, blockchain, AI and medical technologies. The London-based fund, which also has offices in Shenzhen and Beijing, serves as a business intermediary, helping foreign technology companies to expand into China. Moving to the country can be difficult for western firms because of the country’s big bureaucracy and Silk Ventures offers an easier way to invest into China.
China is now the world’s major fintech market, with 40% of its population using innovative technology platforms such as Alibab’s payment system Alipay and Tencent’s messaging service WeChat. The country is leading the fintech unicorn sector, being home to eight of the globe’s 27 unicorns. Moreover, the world’s four biggest fintech unicorns, Ant Financial, Qufenqi, Lufax, and JD Finance, are from China.
Last week, Hong Kong’s Securities and Futures Commission (SFC) signed a cooperation agreement with the UK Financial Conduct Authority (FCA) to drive financial technology innovation in the countries. The partnership will make it easier for fintech companies to access one another’s markets. Besides, the deal will eliminate barriers to entry and let regulators to exchange information about financial services innovations.
The UK is another leader in the fintech sector, aiming to dominate the industry. Earlier this month, the country’s major bank, Barclays, announced the launch of the new fintech site in London, which is said to be the largest co-working space for fintech startups in Europe.